Wednesday, 27 July 2016

Brexit Pie - Recipe For Disaster.

Why did Sterling plummet following Brexit?

Perhaps it’s simply because the markets themselves and the fiscal
powerhouses that quietly drive them, could deduce the situation into which Little
Britain had just placed itself and thus adjusted accordingly.

Now the combined UK media that operated such a fervent anti-EU campaign finds
itself in a situation which, in simple terms, means they daren’t explain the ramifications
to its readership. Ditto the Westminster Government, of whatever shade.

Effectively this is what happened on June 23rd 2016.

While there are a lot more subtle flavours to the Brexit Pie, here are
some of the main, basic ingredients listed on the tin. Some flavours were carefully
hidden by ‘Brexiters’ before the vote. Somewhat paradoxically, neither could ‘Remainers’ reveal these
rather toxic elements. It might well also explain why the ‘Remain’ camp ran
such a god awful campaign – they’d no choice.

Ingredients:

1.Over the last half
century or so, Westminster’s policies have effectively taken a powerhouse of a
manufacturing nation where 48% of its output and effectively its folk, were
tied to manufacturing or the production of goods.

2.By 2014 the Office
for National Statistics(ONS) now has only 8% of the population and 12% of
output tied to the manufacturing sector.
This arena has been effectively reduced by 75% under successive Westminster
governments. In quite simplistic terms, the real wealth and lifeblood of the
country has effectively been reduced by a like amount.

3.Now look at the
effect it’s had on historical exchange rates. In 1948, Sterling valued at over
$4. Today, it is around $1.30 and tracking down. Overall, that loss of
manufacturing capacity has tracked our loss of currency value quite nicely.

4.Effectively the UK
now has about one person in 12 in the manufacturing sector. In its bluntest
terms this little Union is asking one person to carry the load of eleven more.
That’s the real fundamental reason for Austerity.

5.Between governmental
economic and fiscal mismanagement at the UK level Westminster is rapidly
leading us to a debt load which the UK is rather rapidly becoming unable to
support.

6.The markets are aware
that the UK effectively just signed away it’s EU rebate and stimulus packages.
Consequently, that’s billion’s a year added to the red ink on that national
ledger, and not over decades.

7.The markets also know
that the UK just resigned from that fabled ‘seat at the top table’ in the
worlds’ most significant trading block. Now Little Britain has no say in the
most significant world around it. We will rely on the goodwill of our
neighbours, goodwill we ourselves have strained to the breaking point.

8.In order to retain
access to the single market, the City of London knows that the British Nations
will need to maintain somewhere close their current contribution level to the
EU.

Method:

Deduct the losses and it’s shaping up to be a rather massive fiscal
hole.

Worldwide finance is aware that these Islands will have to accept EU
directives and EU laws which the EU insists upon, or we will lose or end up with restricted access to that single market.

The United Kingdom voted for immigration control; The EU will not allow
it, Little Britain must accept that, or lose free access to the single market.

Losing access to Europe’s single market is now effectively taking a
basket case economy and flushing.

The EU holds all the aces, its member states the remaining cards, while
the UK has effectively folded, walking away from the table.